Report WT 98-1 WIRELESS TELECOMMUNICATIONS ACTION February 3, 1998
COMMISSION AFFIRMS KEY PROVISIONS OF LMDS SECOND
REPORT AND ORDER, PAVING WAY FOR AUCTION
(CC Docket No. 92-297)
Today the Commission, responding to petitions for reconsideration, generally affirmed
key provisions of the Local Multipoint Distribution Service (LMDS) service rules that it adopted
in March 1997. The action paves the way for the auctioning and licensing of LMDS, a fixed,
broadband point-to-multipoint wireless service that has significant potential in offering a broad
range of one-way and two-way voice, video, and data service capabilities, and a substantial
amount of capacity that is larger than currently available wireless services.
Among other things, the Third Reconsideration Order generally denied the petitions for
reconsideration, rejecting requests to modify the LMDS eligibility restrictions on incumbent cable
systems and local exchange carriers (LECs). Currently, the restrictions prohibit incumbent LECs
and incumbent cable companies (for a three-year period expiring June 30, 2000) from holding
attributable interests in an in-region LMDS licensee. The rule, however, permits incumbent LECs
and cable operators to participate in the LMDS auction, subject to post-auction requirements to
divest holdings that would violate the restrictions. The Commission, in the Third Reconsideration
Order, rejected arguments that incumbent LECs and cable operators should be barred completely
from participating in LMDS auctions, concluding that the post-auction divestiture provisions are
a sufficient means to enforce the eligibility restriction. In addition, the Commission affirmed that
an "attributable interest" for purposes of the eligibility restriction is an ownership level of 20
percent or higher, and rejected arguments that the triggering threshold should be lower than 20
percent or should include certain convertible non-equity investments. The Commission also denied
claims that rural LECs should be excluded from the eligibility restriction.
The Commission noted, however, that its general policies regarding marketplace
competition, ownership diversity, and the prevention of anticompetitive behavior may benefit from
an evaluation of the criteria that should be used in establishing ownership restrictions and
ownership attribution standards in a variety of services, and indicated that it plans to initiate a
proceeding later this year to examine these issues.
(over)
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The Commission also upheld the band-use plan adopted for spectrum at 31.0-31.3 GHz
(31 GHz band) that designates the entire 300 megahertz for LMDS and terminates licensing under
the previous point-to-point 31 GHz service rules. However, the Commission decided that 31 GHz
applicants that had pending applications that were dismissed in the LMDS Second Report and
Order, would be allowed to refile for the same authorization, but secondary to LMDS. These
operations may not cause interference to an LMDS licensee and must accept any interference from
an LMDS licensee.
In addition, the Commission affirmed its flexible construction rule, which requires that
licensees must provide "substantial service" during the 10-year license period. In connection with
its reconsideration of the LMDS service rules, the Commission also denied petitions to further
reconsider its decision to deny applications for waiver of the 28 GHz point-to-point microwave
rules that existed before the adoption of LMDS.
The LMDS auction begins on February 18, 1998.
Action by the Commission February 3, 1998, by Third Order on Reconsideration (FCC
98-15). Chairman Kennard, Commissioners Ness, Powell, and Tristani, with Commissioner
Furchtgott-Roth concurring in part and dissenting in part. Chairman Kennard and
Commissioners Ness, Furchtgott-Roth, and Powell issuing separate statements.
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News Media contact: Elizabeth Lyle at (202) 418-0654.
Wireless Telecommunications Bureau contact: Barbara Reideler at (202) 418-1310.